Einführung in die Makroökonomie

Vorlesung 1

Universität Bern
Frühjahrssemester 2023
Carlos Lenz

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 Einleitung
• Organisatorisches: ilias.unibe.ch
– 3069-FS2023-0: Einführung in die Makroökonomie
– Kursprogramm, Folien, Übungen, Podcasts, Forum
• Lehrbuch:
– Jones, Charles I.: Macroeconomics
(5th ed. 2020 / 4th ed. 2017)
• Übungen: ab 28.Feb. / 1. März
• Fragen und Diskussion:
– ILIAS Forum
– Vorlesungen
– Übungen
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 Programm
Date Topic Jones Date Topic Jones

23.02. Introduction 1; 20.04. Inside the Central Bank: Con- 12.5–12.8

2.1–2.2 trolling Nominal Interest rates

02.03. Measuring the 2.3–2.4 27.04. Stabilization Policy and the 13.1–13.4
Macroeconomy AS/AD Framework

09.03. Inflation and Output in the 8; 04.05. The Short-Run Model in 13.5–13.6
Long Run and the Short Run 9.1–9.2; 9.4 Action

16.03. The IS Curve 11 11.05. Monetary Policy in the Short- 13.7–13.8

Run Model

23.03. Current Macro Outlook: Konjunktur- 25.05. The Great Recession and the 14
www.seco.admin.ch tendenzen Short-Run Model

06.04. Monetary Policy and 12.1–12.4 01.06. Outlook

the Phillips Curve

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 1.1 What Is Macroeconomics?
• Important macroeconomic questions to
consider:
– Why is today’s average American
• more than 10 times richer than 100 years ago?
• 50 times richer than the average Ethiopian?
– Do we understand and know the causes of
• the global financial crisis in 2008?
• the Great Recession in 2008/2009?
– What are the economic consequences of the…
… COVID-19 pandemic?
… war in Ukraine?
– What role do stock markets play in the economy?
What is a “bubble”?

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• Topics studied in macroeconomics

– The unemployment rate

• fraction of the labor force that wants work but does
not currently have a job.
– The inflation rate
• rate at which prices are increasing in an economy.
– Government use of policy to direct or stabilize
the economy
• fiscal policy
• monetary policy

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 1.2 How Macroeconomics Studies
Key Questions

• Macroeconomists have a general

approach to study questions of interest:
– Document the facts
– Develop a model
– Compare predictions of the model with
original facts
– Use the model to make other predictions
that will eventually be tested

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• Parts of an economic model
– Parameter
• an input that is fixed over time, except when the
model builder changes it for an experiment.
– Exogenous variable
• an input that can change over time, but determined
ahead of time by the model builder.
• exogenous = “outside of the model”
– Endogenous variable
• an outcome of the model – something that is
explained by the model.
• endogenous = “within the model”

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 2.1 Introduction
• In this chapter, we learn:
– The importance of gross domestic product
(GDP)
– The composition of GDP, and how it has
changed over time.
– How to use GDP to examine
• the evolution of living standards
• differences in living standards across countries.

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• National income accounting
– Method of aggregating the production of
diverse goods into a single measure of overall
economic activity.
• National accounting
– State of an economy at a given time.
– Changes to an economy over time.
– Differences across countries.

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2.2 Measuring the State of the Economy

• Gross domestic product (GDP)

– The market value of the final goods and services
produced in an economy over a certain period.
• Nominal GDP 2021
– US: USD 23.3 trillion (USD 70‘000 per person)
– CH: CHF 732 billion (CHF 84'000 per person)
• Nominal GDP 1995
– US: USD 7.64 trillion (USD 29'000 per person)
– CH: CHF 417 billion (CHF 59'000 per person)

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• Production measure of GDP
– The number of goods produced in the
economy.
• Expenditure measure
– The total purchases in the economy.
• Income measure
– All the income earned in the economy.

• All three approaches give identical

measures of GDP.
Thus:
Production = Expenditure = Income

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 The Expenditure Approach to GDP

• The national income accounting identity

states:

• Where
Y = GDP (in dollars)
C = consumption
I = investment
G = government purchases
NX = net exports = exports – imports

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 The Income Approach to GDP

• The income approach

– Measures the sum of all income earned in
the economy.

• Capital
– Inputs into production other than labor that
are not used up in the production process.
– Firms increase capital through investment.

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 The Income Approach to GDP

• Depreciation

– The deterioration of the capital stock due to

wear and tear.

GDP – depreciation = net domestic product.

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• Total shares of GDP to inputs:

– Share of GDP to Labor: two-thirds

– Share of GDP to Capital: one-third.
– Labor’s share of GDP has remained
approximately constant over time (?).

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 Share of Labour Compensation in GDP (United States)
0.65

0.64

0.63

0.62

0.61

0.60

0.59

0.58
1960 1970 1980 1990 2000 2010

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 The Production Approach to GDP

• There is no “double counting” in GDP; only

the final sale of goods and services count.
• Value added
– The amount each producer contributes to
GDP.
– The revenue generated by each producer
minus the value of intermediate products.
• Only new production of goods and services
counts toward GDP.

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What Is Included in GDP and What’s Not?

• Only goods and services that are

transacted through markets are included in
GDP.
• GDP does not include:
– Government transfer payments to individuals.
• Social Security, Medicare, unemployment
insurance
– A measure of the health of a nation’s people.
– Changes in environmental resources.

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